Q - We had an order go out that had tax on it when the customer was flagged as N for taxable. Here is the scenario.
Order 505862 was written up back on 3/21/17. It was a back order for an item. At the time, the customer was set to "Y" on the taxable flag. See this sample screen:
The customer sent in their tax ID information in early April, so the customer taxable status was changed to N after that.
Last week, we filled the back order for order# 505862. But it went out with tax on it. Shouldn't the system be looking at the customer's taxable parameters and not at what the taxable flag was when the original order was written up?
A - Here is the issue. Once an order was created, the taxable flag stays with the order. If it is taxable, it is taxable. If it is not taxable, then it is not taxable. From that point on, even if the customer changes from taxable to non-taxable, it is not going to affect the order, and vice versa.
Here is the reason behind this. If a customer places an order and says the order is for internal use, not for resale, then the order should be taxable even if customer has reseller status. So the order taxable flag stays unchanged once the order is created. Therefore, you need to have an internal procedure so that if a customer is changed from taxable to non-taxable, then the user should also check to see if there are any outstanding orders for which the taxable flag should be flipped. Hopefully, this type of scenario does not happen often and does not create a burden once you have the procedure in place.